G.R. No. 201193 - TRANQUILINO AGBAYANI, V. LUPA REALTY HOLDING CORPORATION.

Ruling

Accordingly, [he] prayed for the cancellation of Lupa Realty's TCT No. T-109129 and the reinstatement of OCT No. P-46041 in his name, plus damages. In its Answer , Lupa Realty countered that contrary to the allegation of Tranquilino that he never sold the subject property, he sold the same to his brother, Nonito Agbayani ( Nonito ), as shown by a notarized Deed of Absolute Sale executed on 21 January 1992. In turn, Nonito sold the subject property to Moriel Urdas ( Moriel ) in a notarized Deed of Absolute Sale , dated 30 May 1997. According to Lupa Realty, it acquired the subject property not from Tranquilino but from Moriel by way of a notarized Deed of Absolute Sale , dated 29 October 1997. Lupa Realty further insisted that it was an innocent purchaser for value and in good faith. Lupa Realty explained that it was Moriel and his mother who registered the sale in the Registry of Deeds, as shown by the Affidavit executed by Moriel's mother. According to Lupa Realty, it had no idea that Moriel and his mother had used a falsified deed of sale with Tranquilino's forged signature in registering the sale. Thus, Lupa Realty filed a third-party complaint against Moriel to enforce the latter's warranty of a valid title and peaceful possession against the claims of third persons. In his Answer to the Third-Party Complaint , Moriel denied having caused the registration of the sale to Lupa Realty, and denied having prepared the falsified deed of sale that was used in transferring the title to Lupa Realty. Moriel insisted that contrary to Lupa Realty's assertions, it was actually the latter's personnel who registered the sale. Moriel laid the blame squarely on Tranquilino for having entrusted his original certificate of title to his brother Nonito, thereby making it possible for the latter to fraudulently transfer the property to an innocent third person like Moriel. Thus, Moriel filed a Fourth-Party Complaint against Nonito, praying that if it turns out that Tranquilino really did not sell the subject property to Nonito, the latter should be made liable for whatever liability may be adjudged against [Moriel]. In his Answer (to the Fourth-Party Complaint) , Nonito admitted to having signed the Deed of Absolute Sale in favor of Moriel, but qualified that the execution of the same was "attended by undue pressure considering that at that time, [Nonito] was of confused state of mind brought about by the numerous unfortunate events that beset his family." According to Nonito, it was Moriel who prepared the Deed of Absolute Sale , which [Nonito] mistakenly believed to be merely one of mortgage to secure a loan that he had obtained from Moriel. Accordingly, Nonito prayed that the fourth-party complaint against him be dismissed and that the Deed of Absolute Sale in favor of Moriel be nullified. Curiously, during trial, despite Tranquilino's insistence that his signature on the deed of sale in favor of Lupa Realty was forged, he did not present a handwriting expert t